Trump Dead Wrong on Canadian Trade

Donald Trump. Photo from whitehouse.gov.

Here is some more fake news about our escalating trade war with a host of other countries, including our best allies.

Way down deep in this week’s articles on the growing list of tariffs and counter-tariffs was the fake news that the U.S. actually had a trade surplus with Canada in 2017. Our northern neighbor, who has been with us in every major war, flooded the U.S. with $333 billion in its goods and services, according to the federal Office of the U.S. Trade Representative.

That source would be part of the Trump Administration.

The other half of the equation, though, is our exports to Canada last year. They totaled $341 billion. That means we had an $8 billion surplus in trade with Canada in 2017.

Is there any question why Prime Minister Justin Trudeau pushed back on President Donald Trump’s new tariffs on Canadian timber, steel and aluminum? Is there any justification for our president to tweet that Trudeau was “very dishonest & weak” in taking a tough stance? The tweet was meant to insult and it did.

There probably isn’t a single Canadian who doesn’t agree with the prime minister. Some agree so much that there is a growing movement to boycott American goods. That, of course, means fewer exports to Canada in 2018. That, in turn, means fewer jobs making those products on this side of the border.

That’s just part of the damage. American consumers will be paying higher prices for all kinds of goods, such as houses that had used lower-priced Canadian lumber. U.S. lumber producers aren’t stupid. They will raise their prices to just a tad below the price of Canadian timber that includes the new tariff.

Some U.S. manufacturers won’t even be able to get enough raw materials, such as some kinds of steel, from U.S. suppliers – at any price. This country simply doesn’t have the capacity.

Here in fly-over country, which put Trump into the Oval Office, the trade war is even more harmful. Wisconsin also had a trade surplus with Canada: $6.5 billion in exports and $4 billion in imports.

The Trump Administration can make a better case for trade sanctions with Mexico and China, with trade deficits $71 billion and $338 billion respectively. China is two-thirds of our trade imbalance.

Yet Wisconsin also has a trade surplus with Mexico: $2.8 billion in imports vs. $3.5 billion in exports. (Disclosure: Serigraph has a plant in Mexico to serve our customers there.)

President Trump trumped China’s counter-tariffs Tuesday by jacking the amount of incoming Chinese goods facing new taxes from $50 billion to $200 billion. It’s a big poker game to see who blinks first. It’s great theatre that puts our leader in center stage, which is where he likes to be.

Will his blunt instruments work? No one knows, including him.

One part of the big gamble is that there will be a lot of collateral damage to consumers who pay more and to people who lose their jobs in export industries.

The Wisconsin Republican delegation must be suffering from severe heartburn over the trade wars on top of their indigestion over the Trump Administration’s soaring domestic deficit and debt levels.

There is no way that the twin deficits won’t be major issues in the fall elections.

John Torinus is the chairman of Serigraph Inc. and a former Milwaukee Sentinel business editor who blogs regularly at johntorinus.com.